Ultimate Guide to Web3 Product Management (+ interview questions and answers)

Product Management
Exponent TeamExponent TeamLast updated
This post was written by Jeffrey Hinojosa, a Product Manager II at Coinbase. He focuses on Web3 and Coinbase's self-custody product, Coinbase Wallet. He previously worked in data science at Xerox.

A preview of the most commonly asked Web3 product manager interview questions:

- "You're the PM of the Coinbase consumer app, and you need to add new tokens. Walk me through your process." View answer.
- "How do you create healthy market dynamics for token trading between buyers and sellers?" View answer.

For a product manager looking to stay at the forefront of new technology, Web3 can be a great arena to develop your skills. Web3 does pose unique challenges as a product manager, however.

This article highlights the following:

The Basics of Web3

Web3 is a term that builds upon the past two major Internet revolutions. Each revolution is characterized by adding new capabilities to what’s possible on the Internet.

🖥️ Web 1.0

The early days of the Internet in the 1990s are called Web1, where users created or consumed written content.

Early Internet users may remember sites like Geocities, where people created small info-sites and communities around niche topics. 

Web1 included email, chat rooms, forums, websites, and early e-commerce. The "read-only web" had little real-time network engagement or social interactivity beyond chatrooms and instant messaging.

Product Management in Web1:

The role of product management in Web1 was not as well-defined as it is in Web2 and Web3.

Companies may have had product managers who were responsible for overseeing the development and launch of new websites or online products. But the focus was more on the technical aspects of building and maintaining the websites rather than on user experience and customer needs.

📱 Web 2.0

Once we began networking with each other with social apps like Facebook, communities emerged. We began using the Internet as an extension of our social spheres. This is called Web2.

Commerce became more complex, smartphone technology enabled ever-connectedness, and digital presences became more deeply tied to real-world social identities.

Services like Myspace, Facebook, and Twitter are examples of early dominant players that epitomize the era of Web2 emergent services.

Web2 is also the birthplace of a more individualized creator economy. Social platforms allow artists and businesses to utilize more targeted advertising or grass roots audience development.

Product Management in Web2:

Product managers in the Web2 space oversee the development and launch of new products or features for a company.

This involves working closely with cross-functional teams such as engineering, design, marketing, and sales to define the product roadmap, set goals and objectives, and identify and prioritize new features or capabilities.

🕸️ Web 3.0

Web3 is all about decentralization.

Computers and users communicate by connecting to servers to retrieve information in the current Internet era. The source of "truth" for this information relies on servers to always stay online and maintain an accurate record of their data at all times.

It requires a level of trust between the user and the provider because the source of information or data is hidden from the end user. If servers go down or a company goes out of business, that data risks being lost forever.

Web2 vs. Web3: Social Media Platforms

An example of a technology that works on Web2 is a social media platform like TikTok. Users can create profiles, connect with friends, and share content. In this case, TikTok is the central authority and controls the platform. They decide what data goes on your feed and blur the line of ownership as they distribute that content.

An example of a technology that works on Web3 is a decentralized social media platform like Steemit. Here, users can create profiles, connect with others, and share content in a decentralized manner. The content is all posted to the blockchain. This creates a clear and verifiable history of an idea or post.

In this example, users on Steemit can continue to own their posts and earn a share of ad revenue whenever their posts are shared or engaged with.

Web3 challenges that idea by decentralizing data and applications. By publishing data to a blockchain, it's possible to independently verify the ownership and accuracy of the information at all times.

Web3 is distinguished by:

  • Decentralization of services
  • Digital ownership
  • Executional transactions in decentralized commerce

What's the difference between Web1, Web2, and Web3?

Where Web1 could be classified as “read-only” and Web2 more as “read, write, and share,” Web3 continues all the existing aspects of the Internet with an additional layer of ownership and protocol-based execution.

We could describe Web3 as “read, write, share, own.”

Artwork in Web1, Web2, and Web3

In Web1, an artist might share a JPEG image of a piece of art they created on their personal blog. A visitor can visit their blog to view the artwork. There may also be a phone number or email address listed on the artist's website to contact them.

In Web2, artists can share their art directly with fans via social media platforms. Over time, they build an audience and generate sales and engagement with their artwork.

In Web3, an artist could create an NFT of their artwork and limit it to 10 copies. Then, they can sell the NFT and create exclusive benefits for owners of the NFT, like meet-and-greet events and more. The actual owners of the NFT are always documented on the blockchain, and the artist may even get a % of royalties every time the artwork is bought and sold.

📈 Tips for an Aspiring Web3 Product Manager

Trying to get a job as a product manager in Web3 or crypto? Here are some tips to get started on that career journey.

1. Use Web3 products

In any industry, the better you know your product and customers, the better prepared you are to do your job as a product manager.

If you are not an active user of Web3 yet, start! Engaging directly with decentralized apps, communities, projects, and use cases for this new Internet era is the best way to understand the benefits, challenges, and opportunities it brings.

The best way to understand Web3 is to be a Web3 user yourself.

Tips to get started with Web3

  1. Shop for an NFT on a popular marketplace such as OpenSea.
  2. Send some cryptocurrency overseas instead of using standard remittance services.
  3. Curate your social media feeds to keep up with crypto's latest news and ideas.
  4. Try self-custody your crypto with a hot wallet like Coinbase Wallet or a cold-storage hardware wallet like Ledger.
How to self-custody crypto for beginners:

Just like with real physical money, it's essential to keep your cryptocurrency safe. If you don't protect your digital assets, they may get stolen if you ever lose your computer or get hacked!

One way to do that is to "self-custody" it, which means you take on the responsibility of making it safe.

There are two main ways to do this: a "hot wallet" or a "cold-storage hardware wallet."

A hot wallet is like a digital wallet that you can use on your phone or computer to store your crypto. It's called a "hot" wallet because it's connected to the Internet and is easy to use. An example of a hot wallet is Coinbase Wallet.

A cold-storage hardware wallet is a little different. It's a physical device, kind of like a USB drive, that you can use to store your crypto offline. It's called "cold" storage because it's not connected to the Internet, which makes it more secure.

An example of a cold-storage hardware wallet is a Ledger.

2. Be nimble

Web3 moves and changes quickly. You will not be able to see around every corner, so you must be nimble instead.

Setting up your plans, teams, and workflows to be able to adapt can help ensure you are well-positioned to pursue new opportunities as they arise.

Tip: I am a big fan of what is called the Minimum Viable Process.

A less well-known MVP acronym than the Minimum Viable Product, the Minimum Viable Process asks: “What is the lightest weight process we can use to achieve our goal and no more?”

As teams and products scale, so must the way they operate. Keeping your processes light and flexible helps position you to adapt as needed.

3. Know your customer

Knowing your customers is not particularly revolutionary advice for product managers.

Understanding your user personas, needs, and pain points is essential to building products that solve real problems in ways that resonate with customers. 

Web3 user personas can be a bit unfamiliar to product managers from more traditional industries.

Web3 User Personas

  • Crypto natives: These deep crypto users have been in Web3 long before it was even called that. Crypto natives have been around the pre-2017 bull run and have seen a few very high running price cycles, followed by deep crypto winters. They typically understand crypto on a deeper technical level of the blockchain and, as early adopters, may be excited by the technology or deep believers in decentralization.
  • Developers: Web3 is interesting because there are many opportunities between protocols and other Web3 players. Creating products that serve developers, understanding their pain points, and how they are building in Web3 is important to the evolving infrastructure of the industry. The needs of a highly technical user in Web3 differ from a beginner, and like the trader, speed and reliability may be critical.
  • New users: We are likely still in the early stages of the adoption of Web3. Much of the coming growth will be fueled by users new to Web3. These users often have more questions, need more guidance, and may also have more doubts. Helping them understand how to do something and why can be important.
  • Traders and collectors: Many view crypto and NFTs as an alternative asset class, either for long-term holding or for short-term trading. Similar to the financial equity markets, this brings a class of institutional and retail investors looking to take advantage of trends and price movements to make a profit. With cryptos volatility, sometimes timing can be everything for a trader.

While this is just one potential interpretation of user segments from the overall user base, you can see there is a wide range of users with distinct use cases in the space!

Depending on your target user type, the product experience may need to differ drastically.

Developer needs and tooling are quite distinct from a new user looking to understand the crypto hype. Spending the time to research and understand your target audience will show in your eventual product market fit.

4. Be bold

My final piece of advice for new and aspiring Web3 PMs is simple: be bold!

Diving into Web3 can be exhilarating on its best days and outright scary on its worst. A boldness of spirit for the undertaking and an imaginative mind for what could be will help center you in the possibilities and tune out the noise when things get volatile.

With the industry’s growing pains also come lush green fields of use cases yet unimagined, big hairy pain points of users yet unaddressed, and endless opportunities to stretch, learn, and develop as a product manager.

If you are interested and excited by the opportunities, philosophy, or technology that Web3 presents, then my advice to you is to be bold and take the leap.

🤔 How is Product Management Different in Web3?

Even though web3 product managers still serve as cross-functional leaders with a focus on results, three key distinctions set it apart:

  • The job is more flexible and undefined.
  • There's not much data yet. Gut feelings carry weight.
  • Everything you do is public and might be on the blockchain forever.

To develop successful products, product managers must be in-depth with their community. Finding a product-market fit can't be done with an Asana board and weeks of market research.

Crypto and Web3 are changing so quickly that being in the weeds with a community is the single best way to know what's around the corner.

Similarly, relatively few people still use crypto and Web3 products. This makes it hard to use data to drive decisions. Sometimes a gut feeling is enough to test out an idea rather than wait for data to roll in.

In some ways, this feels a lot like the early Internet, where people didn't know how we would use it yet. This intuition in Web3 is ill-defined and also invaluable.

Finally, all of the work you do is likely happening in public. The early adopters of crypto and Web3 services have their finger on the pulse of changes across the industry.

The development of new products happens more publicly and on the blockchain. Gone are the days of developing products behind closed doors and revealing them to the public months or years later.

By including the community early on and listening to their feedback, you can build loyal users and customers much sooner. The decentralization idea that powers cryptocurrencies and blockchain technologies are prevalent in all business areas—that's unique to Web3.

Common Web3 and crypto interview questions

  • What's your favorite product and why? Watch Google PM answer.
  • You're the PM of the Coinbase consumer app, and you need to add new tokens. Walk me through your process. View answer.
  • How would you design price alert notifications for the Moonpay app?
  • How would you integrate social media into a crypto wallet platform?
  • How do you create healthy market dynamics for token trading between buyers and sellers? View answer.
  • Tell me about a time you had to make a decision to make short-term sacrifices for long-term gains. Watch Amazon PM answer.
  • Tell me about a time you handled a difficult stakeholder. View community answers.
Sample Interview Question and Answer: "What's your favorite product and why?" (Asked at Capital One)

Answer: "Coinbase Wallet is my favorite product. Coinbase Wallet is a user-friendly hot wallet that allows users to easily store, manage, and transact with their cryptocurrencies.

It also offers features such as built-in exchange functionality and secure storage for private keys, making it a convenient and secure choice for managing crypto assets. It was the product that introduced me to buying cryptocurrencies and made the onboarding process extremely simple.

Additionally, Coinbase is a well-respected and established player in the crypto industry, which adds to the reliability and trustworthiness of other products they release.

Overall, Coinbase Wallet strikes a good balance between functionality and security, which makes it a standout product in the Web3 space.

From a product management perspective, I believe that Web3 and crypto products have the potential to be game-changers for banking and financial transactions. I am excited about the opportunity to work with and contribute to their development."

What is a blockchain?

A blockchain is a series of blocks that are all connected to each other. Each block contains a list of "transactions" or changes that were made to a digital file. This could be a contract changing the ownership of a new car or an update to an old blog post.

When a new transaction or change happens, it is added to the chain's most recent block. The block is then encrypted and added to the blockchain, making a permanent transaction record. This infinitely scalable chain of blocks is called the blockchain.

Now, with the launch of the Ethereum blockchain network, blockchain technology has evolved from solely payment and commerce into full applications and services. Decentralized apps are also called dApps.

Blockchain characteristics

Blockchains, the fundamental infrastructure of Web3, by nature, are:

  • Public
  • Immutable
  • Decentralized

Public means that all transactions on the blockchain can be discovered publicly by anyone that knows what they are looking for, using tools such as block explorers (e.g. Etherscan for the Ethereum network).

Immutable means that once the data is written to the blockchain, it cannot even be changed. There is no undo or delete button, which is vital to ensure its role in commerce as a public ledger. This can make smart contract development unforgiving, as a bug in the code cannot easily be patched.

Decentralization is a fundamental concept in Web3, allowing trustless economies and services. Although the level of decentralization varies, the ethos of decentralization allows users to participate in systems that are independent of a centralized controlling entity.

This helps create opportunities for individuals to participate in Web3 without knowing and trusting each other or having to put trust in a centralized entity such as a bank or government. It also benefits network reliability, optimization, and security, as all data is public and not centrally stored.

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